529 college savings plan Benefits
General Benefits:
- You pay no taxes on the account's earnings.
- The child doesn't have control of or access to the account -- you do.
- If the child doesn't want to go to college, you can roll the account over to another family member.
- Anyone can contribute to the account.
- There are no income limitations that might make you ineligible for an account.
- Most states have no age limit for when the money has to be used.
- If the child gets a scholarship, any unused money can be withdrawn without paying any penalty (just the tax).
- One option lets you prepay tuition at a qualified educational institution at today's tuition rates(see below).
- Another option lets you save money in a tax-deferred account (earnings only) to be used to pay for education at future tuition rates.
Additional 529 College Savings Plan Information